Do neighbourhood facilities matter for slum housing? Evidence from Indian slum clusters

Slum dwellers in developing countries reside in
inhuman conditions with meagre access to basic amenities. There is a strong
possibility that drinking water becomes contaminated by sewerage or general
garbage. Why is it so? Is it because they do not care about living in a clean
environment or is it simply because they cannot afford to do so?

We examine these questions in the context of the
registered slum clusters of four Indian cities--Mathura, Ujjain, Jaipur, and
Ludhiana. Mathura and Ujjain are located in central part of the country and are
predominantly religious cities whereas Jaipure and Ludhiana, located in western
part of the country are more developed with wide spread business and industrial
clusters. Thus, all the four cities witness large scale migration from rural
areas in search of livelihood.Most
migrants end up residing in slums.

A primary survey was conducted by some of the
authors in the year 2006-07 in these cities under a project on urban poverty sponsored
jointly by the United Nations Development Programme and the Government of
India. The detailed data on demography, income, health, housing, neighborhood,
migration, etc. of the slum dwellers were collected.We analyzed the house prices of the owned
residential sample units using a reduced form hedonic equation to find out
which features determine the prices of residential units in slums, and in
particular whether neighborhood cleanliness plays any role or not?

The hedonic price theory is an extension of the
theory of attributes. It assumes that commodity prices are functions of the
attributes that the commodities possess and thus, by studying the changes in
the price of a product with respect to marginal change in the attribute it
possesses, one can find out the premium the consumer pays for the attribute. In
other words, by differentiating the price function with respect to a
characteristic, one can derive the consumer’s marginal willingness to pay for
that characteristic. Using this logic, house prices are considered to be a function
of structural, neighborhood and environmental features of the house, and
residents’ willingness to pay for each feature is derived from the differential
of the estimated hedonic house price equation. We conducted such analysis of
slum house prices using a set of structural, neighborhood, environmental and
legal features of the respective houses. Slums being illegal structures in many
places, features like demolition threat, whether the slum is situated in public
or private land, etc. are likely to affect house prices.We categorized these
variables as legal features. We included two features – presence of flowing open drain in the neighborhood and presence of chocked open drain in the neighborhood
as two neighborhood cleanliness variables. First we estimated the reduced form
hedonic equation of house prices and then using the differential of house
prices with respect to features having significant effect on house prices, we
calculated slum residents’ marginal willingness to pay for the specific
feature. The significant features reflect the slum dwellers’ preferred
attributes in house selection.

We find house
prices varying consistently with many structural variables – built up area, number of rooms, if having
brick wall,concrete roof, separate kitchen, attached bath and toilet, attached
balcony and courtyard, piped water connection, etc. Temporary window and doors had strong negative effect on house
prices. But only few of the neighborhood features—proximity to central business district, presence of streetlight and house being connected tosewage facility from
government showed significant positive effect on house prices. Such results
were consistent across cities. Most of the other neighborhood variables like provision of water, garbage collection, presence
of healthcare etc including presence
of open drain, both chocked and flowing, in the neighborhood showed
insignificant effect on house prices. Demolition
threat had a significant negative effect on house prices.

These results indicate that house selection by slum
dwellers is mostly being guided by features related to house quality, availability
of facilities inside the house and some basic amenities like provision of
street light or sewage system provided by the local authority. However, they
seem to be paying high prices for a good quality house even if it is situated
next to an open drain. Such results have strong implication for Indian cities,
especially with the Swachh Bharat Campaign of the Government of India. First
slum dwellers need to be better informed concerning the importance of cleanliness through campaigns which create
awareness.

Slum dwellers expect public provisioning of most of
the neighborhood facilities, but they are very willing to pay for features like
government supported sewage, street lights, and for being permitted to reside within
the city. Thus, cost sharing is possible in order to provide these facilities
and the revenue generated can be used for information campaigns to inform residents
of the importance of cleanliness.

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Urban Studies is the leading interdisciplinary journal for critical urban research and issues. Since it was first published in 1964 to provide an international forum for research into the fields of urban and regional studies, the journal has expanded to encompass the increasing range of disciplines and approaches that have been brought to bear on urban and regional issues